Key Highlights of the Land Value (Amendment) Act, 2019

President Kenyatta assenting to Land Value Bill among other Bills at State House on 2nd August, 2019

By Mona K. Doshi or Aisha Abdallah
Courtesy of Africa Legal Network

The Land Value (Amendment) Act, 2019 (the Act) came into force on 16 August 2019 and has amended various sections of the Land Act, the Land Registration Act as well as the Prevention, Protection and Assistance to Internally Displaced Persons and Affected Communities Act.

Before its enactment, the Act had gone through the process of public participation in the form of a public hearing carried out at Parliament Buildings in Nairobi. The Clerk of the Senate had also advertised in the local dailies seeking written submissions on the proposed Act.

The Act aims at standardising the value of land in Kenya for the primary purpose of enhancing efficiency and expediting the compulsory land acquisition process. Below are the key highlights:

1. Acquisition of land before payment of compensation

Previously, the National Land Commission (NLC) was required to compensate a landowner prior to taking possession of the land. However, the Act now allows the NLC to take possession of the land and pay compensation at a later date within a reasonable amount of time (not later than one year).

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It may be argued that the provision which provides for compensation to be paid after possession is taken is unfair and unreasonable, particularly where the property was being used for residential purposes by its owner. Similarly, the provision for compensation to be paid within one year is arguably unconstitutional given that the Constitution expressly provides for prompt payment of compensation. One year may be regarded too long a period to be considered prompt.

2. Establishment of the Land Acquisition Tribunal and limiting powers of the court

The Act establishes the Land Acquisition Tribunal (the Tribunal) which shall hear disputes related to the compulsory land acquisition process and in determining such disputes, confirm, vary or quash the decision of the NLC.

Previously, disputes were referred to the Environment and Land Court (ELC). However, following the passing of this Act, the Tribunal has first instance jurisdiction to hear such disputes with the ELC exercising appellate jurisdiction.

Additionally, the Act also provides that where the NLC has taken possession of the land, no order stopping any development of the land may be issued by any court if public funds have already been committed to its development. In essence, this provision bars the Court from granting stay orders, including interim injunctions, once a government project is underway.

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It would appear that the government wants to ensure that future projects it embarks upon do not incur additional unanticipated costs due to delays occasioned by court stay orders. A case in point is the Standard Gauge Railway project where construction was stalled by the Court due to disputes relating to the compulsory land acquisition process, leading to additional costs.

3. Criteria for assessing the value of compulsorily acquired land

The Act provides that valuation of land for purposes of compensation shall be based on the Land Value Index. This is an analytical representation showing the spatial distribution of land values in a given geographical area at a specific time. It is to be developed jointly by the national government and county government.

In calculating the Land Value Index, the declared value of the land for purposes of payment of rates, rents or stamp duty shall be taken into account in addition to other factors provided in the Act such as the increase in the value of the land due to improvements made on it. However, an increase in value will be disregarded if the improvements are carried out after the publication of a gazette notice that sets out the government’s intention to acquire the land compulsorily.

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Different criteria apply for freehold and community land on one hand and leasehold land on the other.

4.  Additional forms of compensation

Apart from monetary compensation, the following new forms of compensation have been introduced under the Act:

  • allocation of an alternative parcel of land of equivalent value and comparable geographical location and land use to the land compulsorily acquired;
  • issuance of government bond;
  • grant or transfer of development rights as may be prescribed;
  • equity shares in a government-owned entity; and
  • any other lawful compensation.

An owner whose land has been compulsorily acquired shall elect the form of compensation. However, compensation may come much later so the choice of compensation would need to be carefully considered.

Attached is the LAND VALUE AMENDMENT ACT, 2019

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